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DEPOSIT GUARANTY NATIONAL SETTLES DOJ CASE.

THE U.S. DEPARTMENT OF JUSTICE (DOJ) has announced that Deposit Guaranty National Bank, Jackson, Mississippi, will pay $3 million to settle allegations that it discriminated against minorities when providing home improvement loans, under a recent agreement with the Justice Department. The case is the first to be brought by DOJ alleging discrimination in a loan underwriting decision process based in part on the credit scoring system used for evaluating loan applications. The agreement resolves claims that the Deposit Guaranty National Bank violated the Fair Housing Act and the Equal Credit Opportunity Act when it illegally rejected qualified African-American applicants through the use of subjective underwriting practices when deciding the approvals and denials of credit-scored home improvement loans. The agreement requires Deposit Guaranty to pay $3 million to about 250 African-American applicants and to maintain an underwriting process designed to ensure that such alleged discrimination will not occur again. DOJ's allegations were directed solely at lending decisions made by Deposit Guaranty personnel between January 1, 1995, and April 30, 1998, prior to the bank's merger with First American National Bank in 1998. First American is not accused of any unlawful conduct, but signed the agreement as the successor to Deposit Guaranty.
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Title Annotation:Deposit Guaranty National Bank; Dept. of Justice
Publication:Mortgage Banking
Article Type:Brief Article
Geographic Code:1USA
Date:Nov 1, 1999
Words:201
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